MW: Gold up, could extend gains to a sixth session
By Myra P. Saefong and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures climbed Friday, poised to extend their gains to a sixth session in a row, as the prospect of fresh economic stimulus from the world’s central banks underpinned demand.
Gold for August delivery GCQ2 +0.68% added $8.70, or 0.5%, to $1,628.30 an ounce on the Comex division of the New York Stock Exchange. The metal is on track for a weekly gain of 2.3%.
Weak U.S. data coupled with troubles in Europe have stirred hopes of more monetary stimulus measures from global central banks. Read more on Thursday's gold session.
“With the weekend upon us, market risks in gold and silver have heightened considerably as the outcome of the Greek election is uncertain, with the left-wing evenly matched with the right wing,” said Julian Phillips, an editor at GoldForecaster.com and SilverForecaster.com.
“By the end of the weekend, we could see Greece still in the euro zone or out of it,” he said in his latest newsletter. “Out of it, will lead to enormous contagion ripples hurting the entire euro zone badly, led by Spain’s request for a bailout.”
On Thursday Reuters reported central banks of major economies are ready to provide liquidity if needed after crucial elections in Greek on Sunday. The vote is expected to determine the Greece’s future in the euro zone.
Gold prices could recover to the “very key” $1,640 level if Greece were to remain in the euro following the elections Sunday, said Frederic Pannizutti, senior vice president at MKS Group, a Switzerland-based precious metals refiner and trader.
Any quantitative easing confirmed at the next Federal Reserve meeting “would confirm the trend,” he said. “The gold price remains fragile, but some of the factors that prevented the bulls ... would be lifted, opening the room for a price recovery.”
Comments from European Central Bank President Mario Draghi on Friday, where he said the central bank “will continue” to provide liquidity, also contributed to that sentiment.
Weak data
U.S. data released Friday showed weakness in the economy, helping to further gold’s safe-haven appeal.
The University of Michigan-Thomson Reuters consumer-sentiment index fell to a preliminary June reading of 74.1 -- the lowest level since December — from 79.3 in May, according to Friday reports. Economists polled by MarketWatch had expected a June reading of 77.8. Read more on the index.
The Empire State index fell to 2.3 in June from 17.1 in May, according to the manufacturing survey released by the New York Federal Reserve. It’s the lowest reading since last November. Economists surveyed by MarketWatch had expected the index to pull back to 12.8. Read more on NY factory activity.
And the Fed reported Friday that industrial production slipped a seasonally-adjusted 0.1% in May after gaining 1% in April. The market was expecting no change in May. Read more on industrial output.
For now, other major metals followed gold higher.
Silver for July delivery SIN2 +0.82% added 23 cents, or 0.8%, to $28.64 an ounce. Copper for the same month delivery HGN2 +1.00% put on 3 cents, or 1% to $3.39 a pound.
July platinum PLN2 +0.29% gained $5.90, or 0.4%, to $1,492.50 an ounce and September palladium was up 10 cents at $635 an ounce.
A weaker greenback was lending support to dollar-denominated metals as well. The dollar index DXY -0.16% , a measure of the greenback against a basket of six major currencies, slipped to 81.726, from 81.917 in North American trade late Thursday. Read more on currencies.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Virginia Harrison is a MarketWatch reporter based in Sydney.
